Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96749
Authors: 
Budd, John W.
Sojourner, Aaron J.
Jung, Jaewoo
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Paper 8098
Abstract: 
This paper empirically examines the widespread belief that voluntarily negotiated agreements produce better long-run relationships than third-party imposed settlements, such as arbitrator decisions or court judgments. Two key outcomes are analyzed – subsequent player performance and the durability of club-player relationship. Major League Baseball provides a compelling setting for these analyses because individual performance is well measured, there is the possibility of relationship breakdown, and both voluntary and imposed settlements are routinely used. While the results clearly show that a third-party imposed settlement is not better than a voluntary one, the evidence in support of the widespread belief is mixed.
Subjects: 
dispute resolution
arbitration
negotiation
salary
sports
baseball
JEL: 
J52
M12
M5
Document Type: 
Working Paper

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